December Payroll and the 13th Cheque: The Rules Employers Actually Need
December is the payroll month with everything stacked against it: early bank cut-offs, public holidays, leave everywhere, and the 13th cheque question that arrives right on cue. Handled in November, it is routine; handled on 20 December, it is the month that ruins someone’s festive season — usually the employer’s. Here are the rules that matter and the sequence that works.
- ✔No law forces a 13th cheque; contracts, agreements and established practice can.
- ✔Removing an established 13th cheque unilaterally is an unfair labour practice risk.
- ✔A 13th cheque is taxed as ordinary remuneration in the month it is paid.
- ✔Run December payroll early and publish the pay date in November.
- ✔The December EMP201 is due 7 January — prepare it before the shutdown.
Is a 13th cheque compulsory?
South African law contains no general entitlement to a 13th cheque. It becomes obligatory in three ways: the employment contract promises it, a collective or bargaining council agreement provides for it, or an established practice — paying it every year as a matter of course — creates a reasonable expectation. In the third case, simply stopping it can land as an unfair labour practice at the CCMA (the unfair labour practice rules).
If your contracts are silent and you want to keep bonuses discretionary, say so in writing: a clause reserving the bonus to company discretion, tied to performance and affordability, reviewed annually. What you cannot safely do is pay it for years, then silently skip one. Variations of the 13th cheque — performance bonuses, pro-rata for joiners and leavers — should live in the same written policy, which is part of the wider contract hygiene in the employment contract mistakes guide.
How the 13th cheque is taxed
A 13th cheque is ordinary remuneration, taxed through PAYE in the month it is paid — which pushes many employees into a higher bracket for that month and produces the annual ‘my bonus was taxed to death’ complaint. It is not a payroll error: annualisation means December’s PAYE reflects the year’s total income, and the employee settles up on assessment. UIF applies to the bonus up to the remuneration ceiling; SDL follows the payroll total.
A one-line note with the December payslip — ‘your 13th cheque is taxed in the month paid, which raises this month’s bracket’ — saves every employer the same ten January conversations.
December payroll timing: early runs and the 7 January EMP201
The mechanics: set the pay date in November and confirm bank cut-offs; calculate holiday pay for anyone working 16, 25 or 26 December under the double-pay rule (the public holiday pay rules); process the 13th cheque in the same run so the PAYE, UIF and SDL totals are complete; and prepare the December EMP201 before closing — it is due 7 January, in the teeth of the holidays. The full close-down sequence is in the year-end payroll checklist.
December payroll done right is invisible — staff paid early and correctly, SARS filed on time, nothing waiting in January. The dates that frame it all are on the employer compliance calendar, and the payroll engine behind it is in the payroll and SARS pillar guide.
Always confirm current requirements with the official source — rules and deadlines change.
- ✔Monthly PAYE/UIF/SDL calculations & EMP201 filing
- ✔Payslips and payroll records handled
- ✔Request a quote for your team size
Frequently asked questions
Must I pay staff a 13th cheque?
Only if the employment contract, a collective agreement or an established annual practice creates the entitlement. There is no general statutory right to a 13th cheque — but cancelling an established one unilaterally risks an unfair labour practice claim.
How is a 13th cheque taxed in South Africa?
As ordinary remuneration through PAYE in the month it is paid. The bonus often pushes the employee into a higher bracket for that month, so the deduction looks steep — it corrects on annual assessment.
When is the December EMP201 due?
By 7 January, for December's payroll including any 13th cheque. Because it falls in the holiday period, prepare the declaration before the December shutdown and submit in the first working days of January.
Last reviewed: July 2026 · How we research our guides
EmployerGuide.online provides general information about South African employer obligations — not legal, tax or professional advice for your specific situation. Laws, rates and deadlines change; confirm current requirements with the official sources linked above, or ask Admin Boss. See our disclaimer.